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America Can’t Even Produce the Things It Invented

nytimes.com

131–140 of 194 posts

Re: America Can’t Even Produce the Things It Invented

#131

Earlier quoted context omitted.

I felt like we should have done that with Saudi oil after 9/11. Why did we let them have no consequences when their policies were most directly responsible for it, out of all countries in the world? We should have put a tariff on their oil and used Canadian crude until they stopped promoting extreme Wahabiism.

Because it would have crashed the US economy. The US was highly dependent on Saudi oil back then, and Canada could not have come close to filling that gap (their output was 2m barrels per day circa 1999/2000, the US needed both all of that supply and OPEC supply). Over time the US has removed its dependency on Saudi oil, courtesy of fracking. OPEC oil is no longer necessary for the US economy. The most interesting th…

No, a US tariff on Saudi Arabia wouldn't matter for either country. Make it an embargo, with other nations coerced into cooperating, and it would matter.

The US was getting oil from closer places like Mexico and Venezuela. Some came from Africa. Saudi Arabia only mattered due to the overall effect on world price. Europe would buy from Saudi Arabia, so Europe didn't need to buy from where the US was buying.

Re: America Can’t Even Produce the Things It Invented

#132

Earlier quoted context omitted.

67.4% of Americans own a home. You don't need to be in the be in the top 10% to benefit. https://www.census.gov/housing/hvs/files/currenthvspress.pdf

That's not exactly what "home ownership rate" means. Home ownership rate is the proportion of occupied homes which are owned by their occupants. If your town has one hundred occupied homes, then 67 of those occupied homes would be owned (or being paid for on mortgagee) by the people living inside. Adult children living at home, adults living in homes with roommates, people underwater on their mortgage, etc would all…

Rising housing prices help people underwater on their mortgage get above water.

Re: America Can’t Even Produce the Things It Invented

#133
post #78

Earlier quoted context omitted.

67.4% of Americans own a home. You don't need to be in the be in the top 10% to benefit. https://www.census.gov/housing/hvs/files/currenthvspress.pdf

I wouldn’t call ownership a benefit for the 71% of home owners with a mortgage. > Zillow’s Negative Equity 2012 Q3 data; we find 29% (20.6 million) of homeowners own their home outright https://www.zillow.com/research/free-and-clear-american-mort...

Just flip it around, would plummeting housing prices benefit homeowners with a mortgage? No, that's a disaster (see the 2007 housing crash). Borrowing, especially at the extreme low rates, on an appreciating asset is great, paying debt on a depreciating asset is a nightmare.

Re: America Can’t Even Produce the Things It Invented

#134
Most stories like these completely misunderstand the issues with american manufacturing.

It's easy to see lower American manufacturing employment and increasing Chinese manufacturing and conclude that American jobs are simply moving to china, but this narrative doesn't hold up to basic scrutiny.

Take for example steel production. American employment in the industry has fallen by 55% since 1989, while chinese production is now 5 times higher. Case closed right? Well no. In that time period, the US built over 40 Million Tons of steel production capacity, 46% of its total capacity. Further, while chinese production has increased dramatically, they are not a major exporter of steel to the US, peaking at 7th largest trading partner in 2015 and currently not even in the top 10. Our biggest steel trading partners are Canada, Mexico, and Brazil.

Looking at the situation more granularly, we see that US steel production has been approximately constant since the early 80s, whereas Chinese steel production didn't ramp up till the 00s, around the same time that the decrease in US steel employment leveled off.

There has been a major shift in how steel is produced over the past few decades. Over this time period, blast furnaces have been shutting down and been replaced with basic oxygen and electric arc furnaces which require less manpower to produce steel. In 1920 it took 3 man hours to produce 1 ton of steel in the US, now 1 man-hour produces 300 tons. Further there have been major shifts in consumption. The US is consuming less steel as most of its infrastrucuture is already built up, and as new products use less steel (either because stronger steels can do more with less or other materials like aluminum and plastics are used instead). China is employing many more steel workers to work less efficient plants, making lower grade steels to fuel its transition into a developed nation.

While this is merely one example, the story is similar in a number of industries - employment goes down in the US, up in China, but there is no decrease in productivity in the US which closely coincides with an increase in production in or exports from China. In general, productivity and capital investment in the US actually remains steady despite shrinking employment, and where there are decreases in productivity, they tend to correlate with reduction of demand, for example in the auto industry.

When people think about automation, they typically picture robots doing what they had been doing. In most industries that hasn't happened, so most people conclude that automation hasn't had any serious impact yet. But the real change is typically in much more mundane process improvement. You don't need as many people to do the same amount of work, and the work that needs doing tends to be different from what was done in the past - more desk jobs and information processing, as well as more low cost unskilled labor, with the blue collar professional in the middle mostly made obsolete. Trade wars with China or subsidies for "onshoring" aren't going to change anything, unfortunately recreating the prosperity of our past will require complicated holistic changes to many sectors, informed by a firm understanding of manufacturing technology and economics.

Re: America Can’t Even Produce the Things It Invented

#135

Real manufacturing output is a lot higher than it was back in the supposed heyday of manufacturing. https://fred.stlouisfed.org/series/OUTMS Manufacturing employment, on the other hand, is down substantially because of automation.

How much of manufacturing output growth was driven by the boom in the oil/gas industry? People hear manufacturing and think electronics or cars, but petroleum and coal was 2x the size of the auto manufacturing last time I looked.

Re: America Can’t Even Produce the Things It Invented

#136
I think what companies really want is manufacturing as a service, much like cloud computing economics but for physical goods manufacturing. They want the ability to scale without building their own infrastructure, they don't want to deal with the personnel, they want to be able to lock-in only the capacity they know they will use and get a discount. The problem is that unlike cloud computing which can automatically scale, manufacturing as a service is all about people. You have to remove people from the equation to the point that the only people are debugging the machines.

Re: America Can’t Even Produce the Things It Invented

#137
post #91

Earlier quoted context omitted.

I would say that Trump's ability to convince people he is knocking down the elites, and instead using the office to benefit both his elite self and his elite inner circle is his greatest hustle, but actually, its quiet an ordinary move that elites have been pulling since the start of time. I feel like to really knock down the elites, you need someone who is not elite. However, anyone who rises to this kind of status…

So you're a radical. You want revolution, not reform. Got it.

Hey now, I never said I wanted anything! But it's hard to believe that removing the elites from power is going to be a simple reform. The most powerful, established and connected people in government aren't going to simply walk away, it would take a major disruption.

Re: America Can’t Even Produce the Things It Invented

#138
post #82
post #67

Earlier quoted context omitted.

Well if cheap labour is not an input then there's no reason that the manufacturing has to be done somewhere with cheap labour costs.

But the automation will need engineers and technicians. China is likely not super reliant if at all on the west for automation expertise, and is likely closing any gap that may exist. They have a legion of more and more well educated people to fill those roles. I’m super worried that the U.S. is turning into Russia, i.e., a corrupt oligarchy with no want or ability to mobilize and educate its people. China saw that h…

On the plus side, if China innovates new technologies, it will make everyone else's life better too, as US innovation has done for the last century or so.

Re: America Can’t Even Produce the Things It Invented

#139

Earlier quoted context omitted.

I thought these technologies are still early and in the research phase. That would make sense for them to operate in stealth mode. Tesla sells vehicles to the public (and let's be real, Elon is a big PR department). Are these companies producing useful products currently? It seems that you're implying that they are and that we (me) aren't aware of them, so I'm curious if you could expand on this and enlighten us. I d…

Regarding products, I'd divide biotech into three very broad categories, medical, industrial, and food. Medical biotech is generally the most well-established, from Genentech (now Roche) on down to the companies being created today. Most of that work are novel and very promising therapies for a range of diseases, and diagnostics/prognostics to detect and track disease states. Both are generally at the level that's po…

Yes, I get all this, but is anyone selling a product? For example, a company like Finless Foods (which I'm decently familiar with) isn't selling meat to customers yet. For this reason it is unsurprising that the general public doesn't know about them, let alone to the same degree that they do for Facebook (billions of users) and Tesla (~1 million vehicles sold). I'm saying these are unfair comparisons (that's at least 6 orders of magnitude difference in users!). If people could get FF in their local supermarket I'd understand your point, but they're (like every other cell-cultured meat company) producing small quantities, learning how to refine the product, and how to scale. It is wildly misleading to say that FF or MM should have the same recognition as Facebook or Tesla. I was asking if there are companies NOT in the research phase and are producing products that I or someone I know would be using. Such a biotech company would be a fair comparison to FB or Tesla and I'd understand the criticism of the lack of fame to them. But you cannot compare companies with 0 users (or 0 planned users for at least a year) to companies with millions or billions of users. That's an insane comparison, regardless of how groundbreaking these technologies could be. Yes, lots of potential, but they aren't there yet. It is potential.

Re: America Can’t Even Produce the Things It Invented

#140
post #18

Earlier quoted context omitted.

Apple: Made by Foxconn, not in the US. nVidia: Made by TSMC, not in the US. Intel and Tesla are made in the US afaik, but even the hardware startups we do have still tend to manufacture abroad.

Apple: assembled by Foxconn. If your premise were accurate, the primary value would be in Foxconn and they'd destroy Apple by competing with them and take their $60 billion per year in profit. Most of the value is from Apple and the other component makers, not the company doing primitive assembly. Further, Foxconn makes nothing in the iPhone, so once again it's very obviously not "made by Foxconn." And that's why Fox…

There are different ways of doing outsourcing. Companies like IBM (and Dell, at one point) outsourced more and more of their value chain, until eventually all they contributed to their products was their logo.

I believe Apple is trying to go down a different path, by staying involved in the minutiae of manufacturing, materials science, etc, basically everything but actually doing the manufacturing.

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